Post-2020 EU Budget Will Present Challenges to Slovenia (Feature)

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Brexit and migration among the trials ahead.

STA, February 27, 2018 – As the EU is expected to open negotiations on changes to its multi-annual budget after 2020, Slovenia faces quite a challenge to ensure tapping into the available funding with the best possible effect, heard a debate hosted by the European Commission Representation in Ljubljana on Tuesday.

Although the post-2020 multi-annual financial framework has been under debate for a while, negotiations are expected to start in May when the European Commission is due to present its legislative proposal.

The Commission would like to complete the negotiations by the spring of 2019, that is before the next elections to the European Parliament, but the debate today heard that such a time plan was very ambitious.

Brexit as well as new challenges related to migrations, the changed security situation, the impact of the economic crisis, coupled with the attempts to reform the euro area, will make the negotiations very complex and demanding, so they do not appear likely to wrap up before the end of 2019 or early 2020.

The impact of Brexit on the EU budget is estimated to be about EUR 10bn annually, the loss of which may be offset through increased contributions by the 27 member states, a cut in expenditure, additional own EU resources or through a combination of the measures.

As a result of the UK leaving the EU, the size of the budget as a share of the bloc's combined gross national income (GNI) is expected to increase from about 1% of the 28-nations' GNI at the moment.

The European Commission's preliminary proposals have mentioned the size of between 1.10% and 1.19% of EU27 GNI, while some of the large contributors insist on keeping it at around 1%. The difference between those two proposals would amount to about EUR 90bn in seven years.

Like most other member states, Slovenia supports the higher figure. It advocates a reform-oriented budget that can respond to new challenges, including globalisation and the effects of technological changes.

Slovenia also expects cohesion policy to remain a key budget item. It also supports further reform so as to tie it more closely to structural changes, to have greater emphasis on competitiveness, on innovation and on creation of quality jobs.

Slovenia will also argue that, apart from its emphasis on the less developed regions, cohesion policy should also focus on transition of some other regions into a new industrial revolution.

The country is aware that Western Slovenia could lose eligibility for cohesion funds, so it will continue to work for its phased transition from a cohesion to a non-cohesion region.

Slovenia also advocates preserving a strong common agricultural policy by keeping the amount of funding at the nominal level, while it does not support the idea of national co-funding of direct payments and is not in favour of continued convergence of direct payments between member states on the basis of acreage alone but also points to objective criteria and result-orientation.

The debate today also heard that Slovenia should no longer see preserving its position as a net contributor as the key goal, but should take a broader perspective.

Given the expected changes to the EU budget, it is deemed critical that Slovenia should do its homework by forming development strategies that would help it use the available EU funds to the best possible effect.

Slovenia is lagging behind in that aspect, as it does in terms of its capacity to tap into Juncker's investment plan and other innovative mechanisms. More should be done to bring about a shift in thinking when it comes to how local communities use EU funds.

Slovenia would like to be part of the core EU, so it should bear in mind that this also entails a greater contribution. The country should also aspire to spend EU funds more efficiently that it could soon become a net contributor itself.